A lifeline for those drowning in debt

Even if you've lost your job, can't pay the bills and feel your position is hopeless, there are lots of ways of pulling yourself back from the brink of financial ruin.

When Kathleen's husband fell ill and lost hisjob, the couple had to assess their financial situation. 'We hadn't told anyone about our debt, and we panicked when faced with redundancy,' says Kathleen. They sold their Luton home and moved in with Kathleen's father in the North East. They then started a nappy-delivery business, which ran successfully for six months until their prices were undercut by larger firms.

After their company was dissolved, the stress of the financial burden - combined with Kathleen falling pregnant and her husband being ill - led to divorce.

Kathleen found herself trying to support two children and keep repayments going on £12,000 of debt with an annual income of £7,000. With the interest on her four credit cards mounting, Kathleen decided to contact a credit advisory agency. 'The first three times I rang I couldn't speak, I just cried down the phone,' she says, 'but when I did finally speak to someone, it was like a huge weight had been taken off my shoulders - I actually managed to sleep that night.

'They worked out a budget for me, which involved making one payment to the agency each month. They then distributed money to eight of my creditors - which helped pay off the debt while reducing the stress of dealing with multiple loans.'

Kathleen has since got her finances under control, and no longer has a credit card or overdraft. She now works as a debt counsellor for the Consumer Credit Counselling Service, advising people how to survive periods of financial difficulty.

'Set up standing orders for your main expenses - the rent, council tax and utility bills - so that the priority bills get paid first,' she advises. Kathleen does a bulk shop every month, avoiding impulse buys. Seeking advice was a major turning point for Kathleen: 'It does get easier because you see light at the end of the tunnel.'